Dec 21, 2008 Letters
I recently read the most disingenuous argument or presentation: “The Economy is Fuelled by Taxes”, by a contributor to “Blame the Government” featured in Kaieteur News, 30-11-08. The article was in response to critics of the VAT. I am a victim of the collateral damage inflicted by this particular tax. As a consequence, I feel compelled to respond for the following reasons.
First, the VAT does not discriminate between good taxpayers and those persons who do not pay their fair share of taxes or evade paying taxes, and who seem to have the collective capacity to continue to resist paying their fair share of taxes.
If the government was serious about collecting taxes from persons who evade taxation and do not pay their fair share of taxes, then the VAT should have been structured and administered differently. Sixteen percent across the board was the easy way of garnering additional revenue in a shrinking or stagnant economy.
The contributor should know that vibrant economies are not fuelled by taxes. I know of no nation in the world that has taxed itself to prosperity or has achieved prosperity by taxing its citizens to death.
Vibrant economies are fuelled primarily by the ingenuity of their human resources and the availability of cheap sources of energy. Apparently, Guyana is yet to be so blessed.
Second, many of the examples of tax evasion stated by the contributor — “the importation by doctors in the private sector of large vehicles that have contributed significantly to the wear and tear of roads, and have increased the need for government to spend more money on fuel; the rice farmers and other businessmen who avoid paying their share of taxes; the double invoicing” — are a reflection of the ineffectiveness of certain governmental or national policies.
These inadequate policies result from our persistence in thinking in boxes, and in being unwilling or unable to conceptualize the larger picture with all its interconnections. In other words, we continue to fail to understand the workings of the forest because we are often so taken up with the individual trees.
Third, while there is agreement that the taxation of citizens plays a significant role in the generation of revenue in some economies, it appears to be heavily relied on in Guyana. We appear to be incapable of developing a vibrant economy. We are still, for the most part, the hewers of wood and the drawers of water.
We seem incapable of attracting certain kinds of foreign investment. The only type of foreign investors that risk investing in Guyana are those that are involved in the extractive industries. Why? Is it because our workforce is not sufficiently skilled?
Is it because there is a perceived breakdown of law and order in our society? Is it because there appears to be a loss of respect for life? The contributor should use his/her intellect to advocate for policies that would result in improvements in our present condition instead of trying to hoodwink the Guyanese public.
Fourth, our economy need not be a “hand to mouth” economy as implied by the contributor. As already stated, a vibrant economy is dependent upon (a) critical masses of mind power in the various sectors, and, (b) the availability of cheap sources of energy.
The former (a), depends upon the transformation of our education sector so that it can facilitate the development of critical masses of mind power with the appropriate attitudes for nation building. Judging by the way the system of education is presently managed, the required transformation can remain forever a dream.
This leaves us with (b) — the availability of cheap sources of energy. One such source comes readily to mind. This source might be called energy efficiency or conservation energy, which can yield, relatively speaking, immediate benefits within the shorter term.
Conservation energy could do more than any of the conventional energy sources to help Guyana deal with its energy problem. The government can take immediate steps to increase the efficiency in the use of energy in Guyana. These steps or interventions do not depend upon any major technological breakthrough.
There is, however, one requirement, and that is, we must be prepared to make some adjustments to the way we are accustomed to do things. Policy makers must begin to look at things differently. They must come out of their separate boxes and take in the bigger picture with all its interconnections.
To illustrate: the government collects a lot of revenue from the continuous importation of vehicles, but, do we know how much of this revenue in the form of fuel is idled away and how much pollution, (including carbon dioxide emission), is created at certain traffic lights because the roadway is too narrow to accommodate more than one line of vehicles in either direction? Only the collection of appropriate data can answer this question satisfactorily.
However, such data can be used to improve the flow of traffic either in the shorter or longer term depending upon the cost benefit and other relevant considerations of possible solutions. We can use significantly less energy that is now consumed to achieve the same goals or reach the same destinations.
There are several interventions that can be employed in the area of traffic that can bring about significant reduction in energy consumption. The recent announcement that “designated bus stops” will be reintroduced is one such intervention.
There are a number of measures that government in collaboration with government corporations and the private sector can implement towards greater efficiency in the use of energy within the shorter term. In the context of a poor (HIPIC) nation, the financial savings that would accrue would be extremely significant.
Conservation energy may well be the cheapest, most productive energy alternative readily available in significant amounts. And as our President, His Excellency, Mr. Bharrat Jagdeo, would readily appreciate, conservation energy is a quality source of energy — it does not release carbon dioxide into the atmosphere.
Conservation can stimulate innovation, employment and economic growth. Some of the savings that will accrue from conservation can be used to fund research into other non-polluting sources of energy.
Mr. /Ms Contributor we live in a modern world, with modern problems, modern challenges and modern opportunities. Our government needs a modern energy policy that is informed by the continuous collection of a vast array of data. The last attempt at an energy policy was made in early 1994 and that was based on insufficient data.
Name and Address Withheld.
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